Honeywell International Inc. (HON): A Bull Case Theory

We came across a bullish thesis on Honeywell International Inc. on The Value Road’s Substack. In this article, we will summarize the bulls’ thesis on HON. Honeywell International Inc.'s share was trading at $208.61 as of October 14th. HON’s trailing and forward P/E were 24.01 and 18.35 respectively according to Yahoo Finance.

Honeywell has announced a strategic review of its Productivity Solutions & Services (PSS) and Warehouse & Workflow Solutions (WWS) businesses, exploring potential sales while maintaining its previously announced spin timelines. The review runs alongside other separation workstreams, with no guarantee of any transaction. Honeywell, with a market capitalization of approximately $136 billion and an enterprise value of around $160 billion, trades at an EV/EBITDA of roughly 14× and offers a dividend yield of 2.2%.

Potential strategic options include selling automation sub-units to industrial software peers, spinning off logistics technology assets to focus on its core aerospace business, or using proceeds from any divestitures for share buybacks or debt reduction. Such moves could unlock significant value, with successful transactions expected to enhance margins and potentially deliver 10–15% equity appreciation. Honeywell’s scale and operational strength imply relatively low execution risk, making the strategic review a noteworthy catalyst for investors.

By rationalizing its portfolio, the company could sharpen its focus on higher-margin, growth-oriented segments while providing flexibility to return capital to shareholders or strengthen the balance sheet. Overall, the combination of potential divestitures, balance sheet optimization, and a clear strategic focus creates a compelling investment opportunity, positioning Honeywell to capture value from both its existing operations and any future portfolio actions. Investors may view this review as an inflection point, with multiple levers to enhance shareholder returns while maintaining the company’s long-term operational resilience.

Previously we covered a bullish thesis on GE Aerospace (GE) by Asymmetric Ventures in May 2025, which highlighted the company’s leading MRO services, recurring Power-by-the-Hour revenue, and strong partnerships with Boeing and Airbus. The stock has appreciated approximately 24.11% since our coverage as GE’s operational efficiency and durable moats played out. The thesis still stands. The Value Road shares a similar approach but emphasizes Honeywell’s strategic review of PSS and WWS, focusing on potential divestitures and portfolio rationalization.

Honeywell International Inc. is not on our list of the 30 Most Popular Stocks Among Hedge Funds. As per our database, 67 hedge fund portfolios held HON at the end of the second quarter which was 75 in the previous quarter. While we acknowledge the potential of HON as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you're looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on the best short-term AI stock.

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Disclosure: None.